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Stock Analysis on Net

Ecolab Inc. (NYSE:ECL)

This company has been moved to the archive! The financial data has not been updated since February 25, 2022.

Common-Size Income Statement

Ecolab Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Product and equipment sales 79.74 80.29 82.11 82.69 0.00
Service and lease sales 20.26 19.71 17.89 17.31 0.00
Net sales (legacy) 0.00 0.00 0.00 0.00 100.00
Net sales 100.00% 100.00% 100.00% 100.00% 100.00%
Product and equipment cost of sales -47.91 -46.49 -47.67 -48.26 0.00
Service and lease cost of sales -11.90 -12.08 -10.85 -10.55 0.00
Cost of sales, including special charges (legacy) 0.00 0.00 0.00 0.00 -53.51
Cost of sales, including special charges -59.81% -58.57% -58.52% -58.81% -53.51%
Gross profit 40.19% 41.43% 41.48% 41.19% 46.49%
Selling, general and administrative expenses -26.83 -28.07 -26.55 -27.06 -31.92
Restructuring activities -0.09 -0.61 -0.78 -0.61 -0.29
ChampionX separation 0.00 0.00 -0.52 0.00 0.00
Acquisition and integration activities -0.23 -0.07 -0.04 -0.06 -0.11
Disposal and impairment activities 0.00 -0.35 0.00 0.00 0.00
COVID-19 activities, net -0.33 -0.20 0.00 0.00 0.00
Gain on sale of business 0.00 0.00 0.00 0.00 0.33
Venezuela related gain 0.00 0.00 0.00 0.00 0.08
Other -0.14 -0.29 -0.08 -0.19 0.01
Special gains and (charges) -0.81% -1.52% -1.42% -0.86% 0.03%
Operating income 12.55% 11.84% 13.51% 13.27% 14.60%
Other income (expense) 0.27 0.47 0.51 0.54 0.00
Interest expense -1.81 -2.59 -1.44 -1.62 -1.98
Interest income 0.10 0.12 0.16 0.10 0.14
Interest expense, net -1.71% -2.46% -1.28% -1.52% -1.84%
Income before income taxes 11.11% 9.85% 12.74% 12.30% 12.75%
Provision for income taxes -2.12 -1.50 -2.16 -2.48 -1.75
Net income from continuing operations 8.98% 8.35% 0.00% 0.00% 0.00%
Net loss from discontinued operations, net of tax 0.00 -18.43 0.00 0.00 0.00
Net income (loss) including noncontrolling interest 8.98% -10.07% 10.57% 9.82% 11.00%
Net income attributable to noncontrolling interest -0.11 -0.15 -0.12 -0.08 -0.10
Net income (loss) attributable to Ecolab 8.87% -10.22% 10.46% 9.74% 10.90%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance of the entity from 2017 to 2021 is characterized by a strategic shift in revenue composition, a general compression of gross margins, and a significant volatility in net income attributable to discontinued operations in 2020.

Revenue Mix and Composition
A consistent transition in the revenue model is evident between 2018 and 2021. Product and equipment sales declined from 82.69% of net sales to 79.74%, while service and lease sales grew from 17.31% to 20.26%. This indicates a gradual diversification toward service-oriented income streams.
Gross Profitability and Cost Structure
Gross profit margins exhibited a downward trend, falling from 46.49% in 2017 to 40.19% in 2021. This decline is primarily driven by an increase in the total cost of sales, which rose from 53.51% to 59.81% over the same period. While the cost of product sales remained relatively stable around 47-48% after 2018, the overall gross margin contraction suggests rising input costs or pricing pressures.
Operating Expense Management
Selling, general, and administrative (SG&A) expenses as a percentage of net sales decreased from 31.92% in 2017 to 26.83% in 2021, suggesting an improvement in operational efficiency. However, this gain was partially offset by special charges, which peaked in 2020 at -1.52% of net sales, driven by restructuring, acquisition integration, and COVID-19 related activities.
Operating Income Trends
Operating income remained relatively resilient but showed a slight overall decline, moving from 14.60% in 2017 to 12.55% in 2021. The lowest point occurred in 2020 at 11.84%, reflecting the combined impact of margin compression and pandemic-related disruptions.
Net Income and Bottom-Line Volatility
Net income attributable to the company was stable between 2017 and 2019, ranging from 9.74% to 10.90%. A severe anomaly occurred in 2020, where net income plummeted to -10.22%. This loss was almost entirely driven by a net loss from discontinued operations amounting to -18.43% of net sales. By 2021, the company returned to profitability with a net income margin of 8.87%, although this remained below pre-2020 levels.
Financial Obligations and Taxation
Net interest expense showed volatility, peaking at -2.46% of net sales in 2020 before recovering to -1.71% in 2021. The provision for income taxes remained relatively stable as a percentage of net sales, generally fluctuating between 1.50% and 2.48%.

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